Earlier, self-employed professionals faced difficulties while applying for a loan, but this is not the case today. The trends have changed in the past few years, but still, it’s important to be careful while applying for a loan.
Here are a few crucial aspects that a self-employed person should consider before applying for a loan against property.
Self-Employed Mortgage Loans Explained
For a self-employed individual, getting a loan against property is relatively complicated compared to other types of loans. However, if you have the necessary documents, you can get such a loan with ease.
Having proper knowledge about the mortgage and knowing the eligibility criteria will definitely improve your chances of getting the loan. In this article, we’ve covered a few essential aspects that a self-employed individual needs to consider before he/she applies for a loan against property.
Why Should You Opt for a Loan Against Property?
Though there are several loan options available in the market, a loan against property, also known as a mortgage loan, is the best choice for a self-employed individual. One of the primary reasons behind this is that loan against property interest rate is relatively lower due to the loan’s secure nature.
A lower interest rate will help maintain lower EMIs throughout the tenure of your loan. Another benefit is that you continue to be the owner of the property you have mortgaged and can avail extended loan repayment tenure as well.
Here are the property types that lenders usually accept to grant loan against property, even for the self-employed professionals.
- Residential property, such as apartment or house.
- Commercial property, such as mall, shop, showroom, or any building owned by you.
- Land owned by you.
- In some cases, lenders also accept rented residential property.
Eligibility to Avail a Loan against Property
Getting a loan against property becomes a lot easier for a self-employed individual who holds a valid income-proof. Though the eligibility criteria vary from one lender to another, here are a few standard eligibility requirements for a loan against property in India.
- Only a resident of India is eligible to apply for a loan against property.
- Generally, people between 24 to 65 years can apply for such a loan. However, the age criteria could be different for different lenders. E.g., Reverse Mortgages work only for seniors age 62+.
- You should possess a minimum turnover accepted by the lender.
- You need to have relevant working experience in the field of your business.
If you are self-employed, it is essential to pay extra attention to the documentation process to avail of a mortgage loan. Here are the documents that you are expected to produce before the lenders.
- Duly filled application form.
- Your recent passport-sized photograph.
- ID proof: voter ID, PAN card, passport, Aadhar card.
- Age proof such as passport, birth certificate, certificate of educational qualifications.
- Residence proof such as electricity bill.
- Income proof, such as the latest income tax return, a balance sheet of the last couple of years.
- Signature verification proof.
- Bank statements.
Wrapping it up
If you are a non-salaried self-employed person, it is vital to know all the guidelines and the terms & conditions before applying for a loan against property.
By using a loan against property, you can modify your business property or expand your existing business. However, it is highly advised that you conduct thorough research to find a reliable lender and get the best overall experience.